Ontario increases tax refund for first-time home buyers
Ontario will refund first-time home buyers up to $4,000 from the land-transfer tax, a small step to ease the pain of the continued increase in price related to the housing market.
The new policy, stated to come into effect January 1st, 2017 will refund first-time home buyers in Ontario up to $4,000 from the land-transfer tax. A move that is expected to help ease the pain of purchasing a home, despite rising house prices. Younger middle-class buyers should be pleased with this new policy, as it is aimed towards them.
Finance Minister Charles Sousa told the legislature earlier this month that "Purchasing your very first home is one of the most exciting decisions in a young person's life, but many are worried about how they will be able to afford their first condo or house.".
To help breakdown the math, the potential $4,000 refund will help erase the land-transfer tax from the first $368,000 of a home price for anyone purchasing their first home. According to the Ottawa Real Estate Board, the average price of a house in Ottawa is $392,579, whereas a Condo is expected to fetch $251,465.
Economist predict that this may not have a huge impact on a city like Toronto, who's housing prices are still increasing at a concerning pace. However, with low mortgage rates still available, a city like Ottawa will benefit from this welcoming policy.
The Government will help offset the potential loss of income by introducing a land-transfer tax increase on other buyers, specifically high priced homes who's price is higher than $2-million (subject to a 2.5% tax rate) and non-home properties, such as commercial buildings over $400,000 (2% tax rate).
Tim Hudak, the incoming CEO of the Ontario Real Estate Association was pleased with the introduction of this new policy and expresses that he is pleased that Premier Wynne and Finance Minister Mr. Sousa are listening to industry related concerns.